interTouch in US$150m Singapore buy
Acquisition of MagiNet will help the NTT DoCoMo subsidiary become a top tech provider to hotels, writes AMIT ROY CHOUDHURY
AHEAD of the much-anticipated Formula One race later this year and the opening of the Integrated Resorts (IRs) a bit further down the road, a top infocomm services provider to the hospitality industry has made a major acquisition in Singapore. interTouch, a wholly owned subsidiary of Japanese telco giant NTT DoCoMo, has completed the purchase of Singapore-based competitor MagiNet for US$150 million.
Mr Reed: Says the ‘combined entity is expected to maintain a high growth trajectory’ and that majority of this growth will be in high-speed Internet access
The company, which provides managed technology services to the global hospitality industry, has its international headquarters in Singapore. interTouch’s acquisition of MagiNet has created one of the world’s largest providers of infocomm technology to hotels.
Speaking to BizIT, interTouch CEO Charles Reed noted that the combined entity will have 1,000 hotels in 56 countries as its customers.
This translates into more than 240,000 installed high-speed Internet access points and more than 140,000 installed DVOD (digital video-on-demand) points worldwide, with more than eight million connections annually.
Parent NTT DoCoMo provided interTouch with a war chest of US$191 million for the acquisition. ‘This includes funds allocated for the acquisition and debt servicing to facilitate the integration with MagiNet,’ Mr Reed said.
The company will also invest into new technology platforms to better service its hotel partners.
Singapore-based MagiNet operated in 31 countries worldwide employing 900 people globally. The company saw rapid growth since its inception in 1991 and had expanded its suite of interactive solutions, such as high-speed Internet access solutions as well as interactive movie entertainment products, Mr Reed noted.
‘MagiNet’s success was further boosted through its acquisition of On Command Asia-Pacific, STSN Asia-Pacific, Thorn Pay Per View hotels in Australia and Net2Room in Singapore. This contributed significantly to the growth of MagiNet as a multinational corporation in a short period of time,’ Mr Reed said.
Post acquisition, interTouch has now expanded its team of employees to over 100 in Singapore and 1,200 globally, Mr Reed noted.
The annual revenue in 2007 for the combined companies is estimated to be in the region of US$150 million.
‘This makes us one of the top two to three largest companies worldwide in the hospitality technology industry,’ Mr Reed noted.
interTouch has experienced rapid growth in recent years, as has MagiNet, and the combined entity expects to maintain a high growth trajectory, he said. ‘The majority of this growth is in high speed Internet access, which has grown by 300 per cent between 2005-2007.’
According to Mr Reed, revenues for interTouch grew 36 per cent in 2007 and this strong performance will continue this year as well.
The acquisition of MagiNet is part of interTouch’s vision to expand its global presence as the premier provider of managed technology network services to the booming hospitality industry.
‘The industry has been experiencing phenomenal growth and the acquisition is timely for interTouch,’ Mr Reed noted.
The amalgamation of two complementary organisations will provide the company with the synergies, scale and product expertise to implement a broad suite of innovative integrated solutions in hotels, he added.
‘Our customers can expect nothing short of the most advanced technology solutions complemented by interTouch’s renowned network monitoring and customer support.’
interTouch is committed to developing innovative technologies to support the needs of hotels today and in the future with a one-stop, comprehensive range of solutions, he added.
‘Not only does the company have a dedicated R&D (research and development) team, interTouch will leverage NTT DoCoMo’s R&D to further enhance its offerings.’
The company has plans to continue expansion into several new markets in 2008, and will continue to build on its team of professionals globally.
The combined company has expanded into India, North and South America and Africa, and plans to continue expansion into new markets in support of global partners’ expansions, Mr Reed said. It also plans to expand its suite of technologies to include managed services and multimedia products.
Mr Reed noted that interTouch recognises that wireless Internet is a convenient way for consumers to access the Internet, and wireless technologies are moving ahead at a rapid rate.
interTouch holds one of the spectrum licences for wireless broadband services in Singapore.
‘It is, therefore, an area that interTouch is exploring for future opportunities. At this stage we are unable to elaborate further on this, however we will update as soon as there are any announcements in this area.’
‘We are committed to developing innovative technologies. With 100 per cent ownership of MagiNet, interTouch will have even greater access to resources and talent to develop innovative technologies that will support the needs of hotels today and in the future, Mr Reed said.
Source : Business Times - 18 Feb 2008
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